Ads in ChatGPT are barely paying off. Do your own maths first
Media agencies running ads inside ChatGPT are seeing little come out of it so far. I read that this morning. Meanwhile I keep getting the same question from people running their own business: should I be in there too? And that question almost always arrives with a second one. What does advertising actually cost me right now, and is this new channel cheaper? Before you move a single euro, you want to know that sum.
What the agencies are seeing
According to Emerce, media agencies are still seeing little result from their advertising campaigns on ChatGPT. OpenAI says it has made improvements to reach audiences better. The agencies already trying it are getting little out of it for now.
That is all the report says, and I am not going to make it into more than that. It is not a disaster and it is not a breakthrough. It is a young advertising channel that still has to prove it works, being tested by people who do this every day and can put serious budget behind it. You do not have that budget. You also do not have the months it takes to test quietly until it maybe starts to run.
The question underneath is about money
I pay attention to what self-employed people actually type when they think about this. What does advertising on Google cost. What does it cost to outsource marketing. What does it cost to outsource social media.
Those are not questions about technology. They are questions about money. The same uncertainty sits under all three: you pay every month for something and you do not know precisely what it brings back. Adding a channel does not make that uncertainty smaller. It only makes your list of fixed costs longer.
So the question is not whether ChatGPT ads work. The question is what one customer costs you now, and whether anything exists that comes in below that.
The only sum that counts: what one customer costs you
Take your last twelve months. Add up what you spent on advertising. Add what you paid an agency, a freelancer or a marketing person. Add the subscriptions you keep purely for marketing: planning tools, newsletter, image library.
Divide that total by the number of customers that genuinely came out of it. Customers who paid, not enquiries and not followers.
Now you have an amount per customer. That is your yardstick. Every new channel, ChatGPT or anything else, has to land below it to mean anything to you. If it does not, you are only moving money from one box to another.
Count your own hours too. A channel you learn to operate yourself costs you evenings. Those evenings have a price, even though no invoice ever arrives for them.
New is not the same as cheap
Every new advertising channel comes with the same story: there is barely any competition yet, so your clicks are cheap. Sometimes that holds for a while. Often, thin competition mainly means there are still few buyers walking around, and then a cheap click is still an expensive customer.
There is something underneath that as well. Every channel you take on is one more party deciding whether your customers can find you. That party changes its prices, its rules or its ranking tomorrow, and you only find out when your revenue dips. I find it calmer to build the things that stay yours: your own site, your own customer list, your own email addresses. Nobody else can put a price on those.
What you can do with this tomorrow
You do not have to buy anything today. You only have to do the sum.
- Look in your bookkeeping for what you spent last year on advertising and outsourced marketing work. One number.
- Count the customers that came out of it. If you cannot trace that, that is your first problem, well before the choice of a channel.
- Divide the amount by that number and write the result somewhere you will see it again.
- Call three customers from the last quarter you would happily work with again. Ask how they ended up with you. It costs you half an hour and it often tells you more than a dashboard.
If the result disappoints you, you are probably paying more for the channel than for the work itself. A new channel is then the wrong first step.
On my site there is a calculation that puts on one page what you currently pay each month for tools and outsourced work. If that sum does not come out in your favour, I say so before you pay anything. Questions are always welcome at info@mia-automation.com.
Frequently asked questions
Should I start advertising in ChatGPT now?
For a self-employed person or a small team I see little reason to right now. The agencies already running it are getting little out of it according to Emerce, and they have budget and time to test. Let them pay the tuition. Come back to it when you know someone in your line of work who is genuinely winning customers there.
How do I work out what a customer costs me if I never tracked it?
A rough calculation is enough to make a decision. Take your total marketing spend from last year out of your bookkeeping and divide it by the number of new customers you gained. The result is not exact, but it lands in the right order of magnitude. That gives you a yardstick to hold against every proposal that comes in.
Is outsourcing my marketing cheaper than doing it myself?
That depends on what your hour is worth and how many customers it brings in. Work out both sides: an agency's monthly fee divided by the customers it produces, against the hours it costs you to do it yourself at your own rate. If you cannot tell, that is usually a sign you are measuring too little, not that you are spending too little.
